MB0041-U1: Transaction: It is transfer of money, goods, or service from one person or account to

another person or account.

MB0041-U1: Book-keeping - It is defined as the science and art of recording business transactions in
a systematic manner in certain set of books known as books of accounts.
MB0041-U1: Book-keeping - It is defined as the science and art of recording business transactions in
a systematic manner in certain set of books known as books of accounts.
MB0041-U1: Accounting is a service activity to provide quantitative information, primarily financial in
nature, and about economic activities, that is intended to be useful in making economic decisions.
MB0041-U1: Process of Accounting Accounting encompasses identifying, measuring, recording,
classifying, summarizing, analyzing, interpreting and communicating transactions.
MB0041-U1: Book-keeping - It is defined as the science and art of recording business transactions in
a systematic manner in certain set of books known as books of accounts.
MB0041-U1: Transaction: It is transfer of money, goods, or service from one person or account to
another person or account.
MB0041-U2: Convention of materiality - This convention states that the benefit derived from
measuring, recording, and processing a transaction should justify the cost of doing it.
MB0041-U2: International Financial Reporting Standards are standards, interpretations, and
framework for the preparation and presentation of financial statements and are issued by IASB.
MB0041-U2: 5 Basic concepts of Accounting Business entity concept, Going concern concept,
Money measurement concept, Periodicity concept, and Accrual concept.

MB0041-U3: Journalising - The transactions and events are recorded in the books (journal) in the form
of entries. These entries are called journal entries and the process is called journalising.
MB0041-U3: Journalising - The transactions and events are recorded in the books (journal) in the form
of entries. These entries are called journal entries and the process is called journalising.
MB0041-U3: Accounting Trail - Accounting trial is a sequential order in which the accounting process
flows from recording of transactions to preparing of profit & loss account and balance sheet.
MB0041-U4: Purchases book - This book is meant for recording purchases. However, only credit
purchases of goods are recorded in this journal as the cash purchases will pass through the cash book.
MB0041-U4: Cash book - Cash book is an important subsidiary book. It is the book meant for recording
all cash transactions i.e., cash receipts and cash payments made during a particular period.
MB0041-U4: Subsidiary Books - The subsidiary books are maintained for transactions that occur most
repeatedly and are most voluminous. For example: sales, purchases and cash transactions.
MB0041-U4: Purchases book - This book is meant for recording purchases. However, only credit
purchases of goods are recorded in this journal as the cash purchases will pass through the cash book.
MB0041-U5: Adjusting Entries - Adjusting entries are journal entries passed for making some
adjustments in the books. They are Opening journal entries, Closing entries and Transferring entries.

MB0041-U5: Transferring entries - When the balance of one account is transferred to another account,
transferring entry is made. Eg. Drawings made by the proprietor are credited to capital account.
MB0041-U5: Trial Balance - It is a list of debit and credit totals or a list of debit and credit balances of
all the ledger accounts prepared on any particular date.
MB0041-U5: Adjusting Entries - Adjusting entries are journal entries passed for making some
adjustments in the books. They are Opening journal entries, Closing entries and Transferring entries.

MB0041-U6: Profit and loss account - It is a statement prepared in order to know the financial
performance (profit or loss) for an accounting period (usually one year).
MB0041-U6: Closing stock - Stock of goods raw materials, semi finished goods, finished goods at the
end of the accounting year is called closing stock. It should be credited to the trading account.

MB0041-U7: A management accountant is commonly referred to as Controller. His main role is to

provide accounting information required by the management for planning, controlling & decision
making.
MB0041- U7: Value added refers to the increase in value of a product/service resulting from an
alteration in the form, location or availability excluding the cost of bought out materials & services.
MB0041-U7: Cost Management System (CMS) - Horngren and others define a CMS as a collection of
tools and techniques that identifies how managements decisions affect costs.
MB0041-U7: Value added ratios - It expresses the value added per unit of an input or any other
measure. E.g. Value added per employee, Value added per rupee of labour cost.
MB0041-U7: Balanced Score Card - An integrated performance measurement technique that is used
to align business activities to the vision and strategy of the organization by improving the processes.

MB0041-U8: Steps in Ratio Analysis 1. Calculate the firms ratios 2. Compare these ratios to those
calculated in the past records 3. Compare the ratios to industry averages.
MB0041-U8: Liquidity ratios - Liquidity is the ability of a firm to satisfy its short-term obligations as
they become due for payment and liquidity ratio reflects the short-term solvency of the firm.
MB0041-U8: Trend Analysis - This technique involves computation of trend ratios (trend percentages)
for a series of years while horizontal analysis gives a picture of only current and previous year.

MB0041-U9: Current assets Assets which are held or receivable within a year or within the operating
cycle of the business. They are intended to be converted into cash within a short period of time.
MB0041-U9: Current assets Assets which are held or receivable within a year or within the operating
cycle of the business. They are intended to be converted into cash within a short period of time.
MB0041-U9: Steps in analysing flow of funds - It involves the following steps. Analysing changes in
working capital, computing funds from operations and Identifying sources and applications of funds.
MB0041-U9: Gross working capital Gross working capital refers to the firms investment in current
assets. Net working capital: Net working capital = Funds= Current assets - Current liabilities.

MB0041-U10: Investing activities Investing activities are the acquisition and disposal of long-term
assets and other investments not included in cash equivalents.
MB0041-U10: Cash equivalents are short term, highly liquid investments that are readily convertible
into known amounts of cash and which are subject to an insignificant risk of changes in value.

MB0041-U11: Batch costing - This method is used to determine the cost of a group of identical
products. The batch that consists of similar products is a unit. Example: production of tablets.
MB0041-U11: Batch costing - This method is used to determine the cost of a group of identical
products. The batch that consists of similar products is a unit. Example: production of tablets.
MB0041-U11: Cost CIMA defines the term cost as the amount of expenditure (actual or notional)
incurred on or attributable to a given thing. The given thing may be a product/service/an activity.

MB0041-U12: Cost Volume Profit (CVP) analysis - A study of the nature of interdependence between
selling price, fixed cost and variable cost is called Cost Volume Profit (CVP) analysis.
MB0041-U12: Break-Even Analysis - It shows the relationship between costs and profits with sales
volume. The break-even analysis shows the relationship between costs and profits with sales volume.
MB0041-U12: Break-Even Analysis - relationship between costs and profits with sales volume. BreakEven Point - volume of activity or sales when the organisations revenues and expenses are equal.

MB0041-U13: Sunk costs (committed costs) These historical costs cannot be recovered in a given
situation. These costs are irrelevant in decision making.
MB0041-U13: Sunk costs (committed costs) These historical costs cannot be recovered in a given
situation. These costs are irrelevant in decision making.
MB0041-U14: Fixed budget - A fixed budget is defined as a budget which is designed to remain
unchanged irrespective of the level of activity actually attained.
MB0041-U14: Steps in Budgetary Control The steps are as follows: Formulation of policies,
Preparation of forecasts, Preparation of budgets and Forecast combinations.
MB0041-U14: Budget is a financial statement, prepared prior to a defined period of time, of the policy
to be pursued during that period for the purpose of attaining a given objective.

MB0041-U15: Standard costing - It is The preparation and the use of standard costs, their comparison
with actual costs, and the analysis of variance to their causes and points of incidence.- CIMA.
MB0041-U15: Steps in Standard Costing Establishment of standards, Comparison of actual costs with
the predetermined standards, Analysing the variances and reporting.
MB0041-U15: Standard costing - It is The preparation and the use of standard costs, their comparison
with actual costs, and the analysis of variance to their causes and points of incidence.- CIMA.

MB0041-U11: Job costing - Used in those business concerns where production is carried out as per
specific order and customers specification. Classified into batch, contract and composite costing.
MB0041-U10: Operating activities Operating activities are the principal revenue-producing activities
of the enterprise and other activities that are not investing or financing activities

MB0041-U9: Current assets Assets which are held or receivable within a year or within the operating
cycle of the business. They are intended to be converted into cash within a short period of time.
MB0041-U8: Steps in Ratio Analysis 1. Calculate the firms ratios, 2. Compare these ratios to those
calculated in the past records 3. Compare the ratios to industry averages.
MB0041-U7: Tools of Management Accounting - ratio analysis, funds flow analysis, cash flow analysis,
marginal costing, budgetary control, standard costing and activity based costing.
MB0041-U6: Closing stock - Stock of goods raw materials, semi finished goods, finished goods at the
end of the accounting year is called closing stock. It should be credited to the trading account.
MB0041-U5: Adjusting Entries - Adjusting entries are journal entries passed for making some
adjustments in the books. They are Opening journal entries, Closing entries and Transferring entries.
MB0041-U4: Sales book - Sales book is the subsidiary book meant for recording sales. Only credit sale
of goods are recorded in this journal as the cash sales will pass through the cash book.
MB0041-U2: 5 Basic concepts of Accounting Business entity concept, Going concern concept,
Money measurement concept, Periodicity concept, and Accrual concept.
MB0041-U1: Book-keeping - It is defined as the science and art of recording business transactions in
a systematic manner in certain set of books known as books of accounts.
MB0041-U10: Cash generated from operations - To find the cash from operations, adjustments will
have to be made for changes in current assets and current liabilities arising on the account of
operations.
MB0041-U14: Flexible budget - A flexible budget is defined as a budget which is designed to change
in relation to the level of activity actually attained.
MB0041-U4: Subsidiary Books - The subsidiary books are maintained for transactions that occur
most repeatedly and are most voluminous. For example, sales, purchases, and cash transactions.

MB0041-U3: Accounting Trail - Accounting trial is a sequential order in which the accounting process
flows from recording of transactions to preparing of profit & loss account and balance sheet.

MB0041-U2: 5 Basic concepts of Accounting Business entity concept, Going concern concept,
Money measurement concept, Periodicity concept, and Accrual concept.
MB0041-U1: Process of Accounting Accounting encompasses identifying, measuring, recording,
classifying, summarizing, analyzing, interpreting and communicating transactions.
MB0041-U13: Sunk costs (committed costs) These historical costs cannot be recovered in a given
situation. These costs are irrelevant in decision making.
MB0041-U12: Marginal Costing - Only variable costs are included to ascertain the cost. Marginal cost
per unit remains unchanged irrespective of the level of activity or output.
MB0041-U13: Decision making - Decision making involves the act of selecting one course of action
from among various feasible alternatives available.
MB0041-U12: Cost Volume Profit (CVP) analysis - A study of the nature of interdependence between
selling price, fixed cost and variable cost is called Cost Volume Profit (CVP) analysis.
MB0041-U11: Job costing - Used in those business concerns where production is carried out as per
specific order and customers specification. Classified into batch, contract and composite costing.
MB0041-U10: Operating activities Operating activities are the principal revenue-producing
activities of the enterprise and other activities that are not investing or financing activities
MB0041-U9: Current assets Assets which are held or receivable within a year or within the operating
cycle of the business. They are intended to be converted into cash within a short period of time.
MB0041-U8: Tools for Financial Analysis - Horizontal analysis, Trend analysis, Vertical analysis, Ratio
analysis, Fund flow analysis and Cash flow analysis.
MB0041-U8: Tools for Financial Analysis - Horizontal analysis, Trend analysis, Vertical analysis, Ratio
analysis, Fund flow analysis and Cash flow analysis.
MB0041-U8: Tools for Financial Analysis - Horizontal analysis, Trend analysis, Vertical analysis, Ratio
analysis, Fund flow analysis and Cash flow analysis.
MB0041-U7: Roles of Management Accounting - Helps in developing and implementing alternative
courses of action by providing data and tools, fixing objectives and taking corrective actions.
MB0041-U6: Profit and loss account - It is a statement prepared in order to know the financial
performance (profit or loss) for an accounting period (usually one year).
MB0041-U5: Transferring entries - When the balance of one account is transferred to another account,
transferring entry is made. Eg. Drawings made by the proprietor are credited to capital account.